Time Management Tuesday: The Hidden Costs of Opportunities


Once, years ago, I took a job for $14 an hour. It seemed like good pay compared to the jobs closer to my home. I thought I was getting a good deal. But there were costs to this opportunity that I wasn’t evaluating which – in the long run – actually meant I was being paid less than minimum wage for that job.

How can this be? Let me show you how to calculate that in real numbers.

Opportunity Costs Are Something Businesses Looks At Before Investing

Most big businesses know about opportunity costs. It's something they use to evaluate whether or not to invest in one opportunity over another.

They don't teach employees this same skill. It's not to their advantage to do so. But it is something I feel strongly every person should know how to do for themselves.

Time: How Much Time I Was Spending at the Job and Commuting.

The job was a typical 8 hour a day job with an hour lunch. However, I didn’t have a car. So, that meant I was stuck at work during that hour.

I only lived 30 minutes away by car, but – again – I didn’t own one. So, I was walking an hour and a half one way to the train station, then traveling 2.5 hours to get to the worksite. I’d already spent 4 hours of my day and I hadn’t been paid yet.

By the time all was said and done, this job actually required a 17 hour a day commitment of my time all to get $14 an hour. I was giving them 17 hours of my day, every day, for $112. I was effectively making just $6.52 an hour before the expenses to get there were subtracted.

Money: How Much Money It Was Costing Me To Do the Work

Every day that I commuted back and forth was costing me $10. So, now that $112 dollars a day is actually $102. I carefully controlled my lunch budget and kept it to just $3 a day. That reduced my earnings to $99 a day.

Resources: How Many Resources of My Own I Needed To Invest

Sometimes, employers require that tools or equipment be supplied by the employee. To calculate that cost, you take the value of the equipment or the tools required and divide by 365, and then deduct that amount from the daily wage you’re being paid. The only resources they required of me was my expertise in design and customer service.

The Opportunity Cost: $8.18 an hour

The opportunity cost is the amount of money per work hour that you are losing by having this job. This $14 an hour job was actually costing me $8.18 an hour to get, meaning that I was effectively gaining only $5.82 per hour of my time.

It wasn’t worth it. I could have worked two jobs and come out ahead, but nobody ever taught me how to calculate this or even that it was something to think about before accepting a job, so I didn’t realize how much I was investing in a job that definitely was not helping me get where I wanted to be in life.

Calculate Your Opportunity Cost.

Your time is valuable and precious. Make sure that you are making the most of that time. Calculate the opportunity cost of your current job and ask yourself whether it’s truly worth all that you are losing out on to keep it.

See if you can’t find a job closer to home or else find one that allows you to subtract the commute time out of the equation. You’ll not only free a lot more of your time up which will reduce the amount of stress you feel, but you’ll effectively be giving yourself a pay raise at the same time.

Project FED: An Opportunity That Requires Little and Gives Much

While there are no guarantees about how much income you can make with Project FED, it offers unlimited income opportunities and the only investment required is your time. I recommend spending between 5-10 hours a week, split evenly between time spent posting about Project FED and time spent learning how to be a more effective marketer.

Once you start making income from it, you aren't paying for commutes or lunches. You don't need an office or staff. The only equipment required is your internet and your computer.

Tomorrow, during Wealth Building Wednesday, I’ll show you just how important investing your time in learning what you need to know is and where to begin that investment.

Join Project FED

Sign up for our newsletter and become part of the movement of people making money online promoting products that support orphans in Nigeria. You can request access to our marketing, become part of the team, or simply ask to see our latest designs. It’s up to you.

What Do You Think? 

Did you find the article helpful? What's your opportunity cost? Do you have a formula you use to calculate it? Let us know in the comments below. 

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